Ivax Denies Ex-McGaw Chairman’s Fraud Charge

Ivax Corp. denied allegations of securities fraud contained in a lawsuit brought by the former chairman of McGaw Inc.

Ivax, a Miami maker of generic drugs, said Friday that the lawsuit, filed Thursday in U.S. District Court in Santa Ana by former McGaw Chairman James M. Sweeney, is without merit. Both the corporation and Chairman Phillip Frost were named as defendants.

“We intend to defend the suit vigorously,” Ivax’s general counsel, Armando A. Tabernilla, said in a statement.

Sweeney alleges that Ivax and Frost misrepresented the company’s financial condition before it acquired McGaw, an Irvine-based maker of medical products, in March.

Lawyers for Sweeney, who resigned from McGaw in February, said in a statement Tuesday night that Ivax issued false and misleading predictions of the value of its best-selling product, a drug called Verapamil. But when the first-quarter results were issued, earnings declined compared to the previous three months.

Ivax’s statement quotes Chief Operating Officer Richard C. Pfenniger Jr. as saying, “We believe that McGaw’s shareholders received excellent value in this transaction.”